WET UTICA Worth $35k PER ACRE ??

Since the New Production #'s Are Out From The Wet Utica Wells..The Trend Is Showing That The Utica Acerage Is Headed Upwards Of 25k-35k Per Acre! It is being compared to the Eagle Ford In Texas. What Are your Thoughts And Opinions??  Some Texas Leases Were $30k Per Acre!

Views: 19183

▶ Reply to This

Replies to This Discussion

Permalink Reply by Joseph-Ohio on May 25, 2012 at 2:24am

I think that there's one benefit of the Land Lease system that isn't publicized enough.

The built in protection that the royalty payment provides.

Because it's based on a percentage of production income if the sell price of the resource rises the Landowner's return also rises.

 

Permalink Reply by Joseph-Ohio on May 24, 2012 at 2:50am

Let's get paid !

 

Permalink Reply by Bernie Horabik on May 24, 2012 at 5:36am

I'm assuming you guys are talking about gross revenue per acre being 35K?

Not the landowner portion?

Permalink Reply by Patricia Patterson on May 24, 2012 at 5:45am

I believe we are talking about the actual value of a sale price per acre being $35k per acre. The gross revenue potentially could be in the hundred of thousands of dollors range depending on each individual well , lifetime of well, and if the well is in liquid rich areas. Again the key is NG prices and demmand.

Permalink Reply by Joseph-Ohio on May 24, 2012 at 6:22am

Quincy Spitzer started the post mentioning 'Wet Utica Wells' and 'Some Texas Leases Were $30k Per Acre!'.  On that basis it sounds to me like Quincy's talking about $30k per Leased Acre (but we don't know that for sure) and nothing is mentioned about the Lease Term / Duration.  $30k per Leased Acre sounds like a huge number as the most I've heard about here in Ohio is in the $5k Per Acre for a Five (5) Year Lease Term neighborhood.

Don't know much at all about the Eagle Ford details and / or even whether or not they were developing 'Wet Gas' or 'Dry Gas' there so it's pretty tough to for me to develop an idea of it's value / value per Leased Acre.

As I read the published data in the (available on-line) Reports and Maps provided by the Ohio Department of Natural Resources, the  'High Prospective Yield Core Area' (that I mentioned in an earlier post above) as identified by the Ohio Geological Survey is defined as a 'Wet Gas' and Oil area of the Utica.

Regarding the 'potentially could be in the hundred of thousands of dollors range' the gross revenue would be measured in much bigger numbers - trillions over the nation / and over the years - especially considering jobs spun off shale oil and gas development - from well labor and production to engineering to manufacturing to administration to service.  They don't call it 'big oil' for nothing.

But, having said all of that, I'm coming to the conclusion / thinking that Quincy's the $35k per Acre is what the Developer sees as a value applicable to his Leasehold Acres - in other words it's worth $35k per Acre considering what he has to sell his developed natural resources for while covering all of his overhead (the Lease, the Equipment, the Labor, the Administration Overhead, and Profit) - dismissing Quincy's Post Title as a kind of typo.

But, maybe I'm wrong - someone should let me know.

 

Permalink Reply by Bob Jenness on May 24, 2012 at 10:15am

I can offer the following firsthand.  I've seen public record legal documents that document a Texas lease at $27500 and 25%, so I'm quite confident that such a lease was actually written - google it if you wish.  Unfortunately, the E&D "partner" welched on this one, and a lawsuit resulted (thus the public record, and why I don't mention the E&D name here).  I suppose it's also possible that the document was somehow faked, but it sure seemed legitimate to my eyes.

Anybody care to confirm or dispute?

Permalink Reply by Joseph-Ohio on May 24, 2012 at 10:46am

@ Bob Jenness:

Thank you for the info.

I've heard from one (1) fellow working as a 'Landman' for a major Land Acquisition Company in Texas that 25% Land Owner Royalty is common (but don't know if I take it as 'confirmation' in the truest sense of the word).

I personally, can't confirm the big number (that I assume was the 'signing bonus'); and still wondering what the Lease Term was (even though the example turned out to be bogus).

That's all I got on Texas.

Permalink Reply by Joseph-Ohio on May 24, 2012 at 10:53am

@ Bob Jenness:

Landowner grouping may be the answer and thanks for reminding me.

Trust however is earned and I've still got reservations.

Call me the eternal cynic - I've been called worse.

Have to stay vigilant.

Good luck to us all.

Permalink Reply by melissa humphrey on May 24, 2012 at 2:04pm

wet gas liquid components are plunging in price. 

Permalink Reply by Cheryl on May 26, 2012 at 1:22pm

Where did you get this information? 

Permalink Reply by Stephen W. Hodgkins on June 1, 2012 at 4:39am

Guys,

Please do the math. Please base it on 1net mineral acre. $NMA= 1/Unit Size * Lease Royalty * Expected Total Production. The value of a mineral acre is considerabily less then you purport.

No Texas Leases were $30,000 per acre

STX Landman

Permalink Reply by Bob Jenness on June 1, 2012 at 11:59pm

$27500 is close enough to $30000 for me.  Of course, the lessee welched.  Perhaps the junior negotiators actually met someone who had good geology and engineering info, then senior management said "Let's not set a precedent by leasing at rates near real values", or such.  

It would be really nice to get the data and math behind Mr. Spitzer's path from "The trend" to "$35K".  All we need are posts from 1 each, geologist, engineer, executive, and landman, with real knowledge.  Anybody???  Or we (if we're kids) can just wait for the drilling logs and production data to enter the public record.  Kids???

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service